Pitchgrade
Pitchgrade

Presentations made painless

Company > Grubhub: Business Model, SWOT Analysis, and Competitors 2023

Grubhub: Business Model, SWOT Analysis, and Competitors 2023

Published: Mar 21, 2023

Inside This Article

menumenu

    In this blog article, we will delve into the business model of Grubhub, one of the leading food delivery platforms in the industry. We will explore how Grubhub operates its online marketplace connecting restaurants with customers, allowing for convenient and efficient food delivery. Additionally, a SWOT analysis will be conducted to identify the strengths, weaknesses, opportunities, and threats that Grubhub faces in the evolving market. Lastly, we will examine the competitive landscape, highlighting the key players that pose a challenge to Grubhub's market dominance in the year 2023.

    What You Will Learn:

    • Who owns Grubhub and the significance of its ownership in the food delivery industry
    • The mission statement of Grubhub and how it aligns with its business goals and values
    • The various revenue streams and business strategies employed by Grubhub to generate profits
    • A comprehensive understanding of Grubhub's business model canvas and its components
    • Identification of key competitors in the food delivery market and the challenges they pose to Grubhub's market dominance
    • A SWOT analysis of Grubhub to evaluate its strengths, weaknesses, opportunities, and threats in the industry.

    Who owns Grubhub?

    Current Ownership

    As of May 2020, the ownership of Grubhub, an online food ordering and delivery platform, is in a state of transition. At the time of writing, the company is in the process of being acquired by Just Eat Takeaway.com, a leading global online food delivery marketplace. The deal, valued at approximately $7.3 billion, was announced on June 10, 2020, and is expected to be completed in the first half of 2021, pending regulatory approvals.

    Just Eat Takeaway.com

    Just Eat Takeaway.com, headquartered in Amsterdam, Netherlands, is a prominent player in the food delivery industry. The company was formed through the merger of Just Eat and Takeaway.com in February 2020. With operations in over 25 countries, Just Eat Takeaway.com serves as an intermediary between customers and local restaurants, enabling customers to order food online for delivery or pickup.

    Previous Ownership

    Prior to the acquisition by Just Eat Takeaway.com, Grubhub operated as an independent publicly-traded company. It was initially founded in 2004 by two software developers, Matt Maloney and Mike Evans, in Chicago, Illinois. Over the years, Grubhub expanded its presence and grew to become one of the leading online food delivery platforms in the United States.

    Evolution of Ownership

    Grubhub went public in 2014, trading on the New York Stock Exchange under the ticker symbol "GRUB." As a publicly-traded company, ownership of Grubhub was distributed among various institutional and individual shareholders who held shares of the company's common stock.

    However, in recent years, the online food delivery industry has witnessed significant consolidation. This has led to a wave of mergers and acquisitions as companies seek to expand their reach and gain a competitive edge. Grubhub, too, became a target for acquisition as competition intensified in the market.

    Impact of the Acquisition

    The acquisition of Grubhub by Just Eat Takeaway.com is expected to have a substantial impact on the online food delivery landscape. The deal will create one of the largest food delivery companies in the world, capable of serving millions of customers across multiple continents. The combined entity will possess significant market power, which could potentially result in improved services, expanded restaurant partnerships, and increased competition with other major players in the industry.

    Conclusion

    While Grubhub is currently undergoing a change in ownership, the acquisition by Just Eat Takeaway.com signifies a new chapter for the company. As the deal progresses and regulatory approvals are obtained, it remains to be seen how the combined entity will shape the future of online food delivery and benefit both consumers and restaurant partners.

    What is the mission statement of Grubhub?

    The Mission Statement of Grubhub: Connecting People with the Food They Love

    Grubhub's mission statement revolves around connecting people with the food they love. As a leading online and mobile food ordering platform, Grubhub aims to make ordering food as seamless and efficient as possible for both consumers and restaurants.

    Grubhub's mission is centered on providing a convenient and reliable way for people to order their favorite meals from a wide variety of local restaurants. By offering a comprehensive online marketplace, Grubhub enables users to explore menus, compare prices, read reviews, and place orders with just a few clicks.

    One of the key aspects of Grubhub's mission is to foster strong relationships with local restaurants. They strive to support and promote these businesses by providing them with a platform to reach a broader customer base and increase their sales. By partnering with Grubhub, restaurants can streamline their ordering process and focus on what they do best - preparing delicious meals.

    In addition to connecting consumers with their favorite food, Grubhub is also committed to enhancing the overall dining experience. They constantly innovate their technology and services to improve efficiency, accuracy, and customer satisfaction. From intuitive mobile apps to real-time order tracking, Grubhub aims to make the entire food ordering process enjoyable and hassle-free.

    Grubhub's mission extends beyond just providing a convenient food delivery service. The company also actively engages in philanthropic efforts, striving to make a positive impact in the communities they serve. Through initiatives like Grubhub Community Relief Fund, they support local restaurants and communities during challenging times, such as natural disasters or the ongoing COVID-19 pandemic.

    In conclusion, Grubhub's mission statement is all about connecting people with the food they love. By leveraging technology and fostering partnerships with local restaurants, Grubhub aims to provide a seamless, reliable, and enjoyable food ordering experience for everyone involved.

    How does Grubhub make money?

    Commission fees from restaurants

    One of the primary ways Grubhub generates revenue is through commission fees charged to the restaurants it partners with. When a customer places an order through the Grubhub platform, the restaurant pays a percentage of the total order value as a commission fee to Grubhub. This fee covers the cost of using Grubhub's technology, marketing services, and access to its vast customer base.

    The commission fee structure can vary depending on various factors, such as the size and location of the restaurant, the volume of orders received through Grubhub, and the level of additional services provided by the platform. Typically, the commission ranges from 10% to 30% of the order value, although it can be higher or lower in certain cases.

    Delivery fees

    In addition to commission fees, Grubhub also generates revenue through delivery fees. While not all restaurants on the platform offer delivery services, those that do often charge a delivery fee to cover the costs associated with delivering the food to the customer's doorstep. Grubhub collects a portion of this fee as a means of monetizing the delivery service it facilitates.

    The delivery fee typically varies depending on the distance between the restaurant and the customer's location, with longer distances often resulting in higher fees. Grubhub may negotiate the delivery fee structure with individual restaurants and may also charge additional fees during peak hours or for orders below a certain minimum value.

    Advertising and promotional services

    Grubhub offers restaurants the opportunity to promote their menus and reach a wider audience through advertising and promotional services. Restaurants can pay to feature their listings at the top of search results or on banner ads within the Grubhub app or website. These featured placements increase visibility and can attract more customers, ultimately generating revenue for Grubhub.

    Moreover, Grubhub offers various promotional opportunities to restaurants, such as discounts, coupons, and special deals. These promotions not only help restaurants attract new customers but also encourage existing customers to place more orders. Grubhub charges restaurants for participating in these promotional campaigns, earning additional revenue.

    Other sources of revenue

    Apart from the aforementioned revenue streams, Grubhub also generates money through several other avenues. For instance, the platform may charge restaurants for access to advanced analytics and data insights, enabling them to make informed business decisions. Grubhub may also earn revenue through partnerships with third-party services, such as payment processors, which provide additional convenience and security to both restaurants and customers.

    Furthermore, Grubhub has introduced a subscription service called Grubhub+ (previously known as Seamless+). Subscribers pay a monthly fee to receive benefits like unlimited free delivery and exclusive discounts. This subscription model generates a consistent stream of revenue for Grubhub, while incentivizing customers to use the platform more frequently.

    In summary, Grubhub primarily makes money through commission fees from restaurants, delivery fees, advertising and promotional services, as well as additional revenue streams like data analytics, partnerships, and subscription services. These various sources of income contribute to Grubhub's overall profitability and enable the platform to continue providing food delivery services to customers worldwide.

    Grubhub Business Model Canvas Explained

    Introduction to the Grubhub Business Model Canvas

    Grubhub is a popular online food ordering and delivery platform that connects customers with local restaurants. Its business model canvas provides a comprehensive overview of how the company operates and generates revenue. By examining the different components of the canvas, we can gain a better understanding of how Grubhub functions as a business.

    Key Partnerships

    Grubhub's success relies heavily on its key partnerships. The company collaborates with restaurants in various cities, allowing them to expand their customer base and increase their revenue. By partnering with Grubhub, restaurants gain access to a wide network of potential customers who can order food from their establishments through the platform.

    Additionally, Grubhub has formed partnerships with delivery drivers and courier services to ensure efficient and timely delivery of orders. These partnerships enable Grubhub to offer a seamless and reliable delivery service, further enhancing the overall customer experience.

    Key Activities

    The key activities of Grubhub primarily revolve around its online platform and mobile application. Grubhub invests significant resources in the development and maintenance of its technology infrastructure to ensure a user-friendly interface and seamless ordering experience for customers.

    Furthermore, Grubhub engages in marketing and promotional activities to attract new customers and retain existing ones. By offering discounts, loyalty programs, and targeted advertisements, Grubhub aims to increase customer engagement and drive more orders through its platform.

    Value Propositions

    Grubhub provides several value propositions to both customers and restaurants. For customers, the platform offers convenience, as they can easily browse through a wide selection of restaurants, view menus, and place orders online. Grubhub's delivery service ensures that customers can enjoy their favorite meals from local restaurants without leaving their homes or offices.

    Restaurants benefit from Grubhub's platform by gaining access to a larger customer base and increased visibility. Grubhub's marketing efforts and user-friendly interface attract new customers to these restaurants, leading to higher order volumes and increased revenue.

    Customer Segments

    Grubhub targets two primary customer segments: individual customers and corporate clients. Individual customers, often referred to as consumers, use the platform for personal food delivery needs. They may include busy professionals, families, students, or anyone seeking the convenience of online food ordering.

    On the other hand, Grubhub also caters to corporate clients who require catering services for meetings, events, or office lunches. By offering specialized catering options and bulk ordering, Grubhub meets the unique needs of these corporate customers.

    Revenue Streams

    Grubhub generates revenue primarily through two main streams: commissions from restaurants and delivery fees. Restaurants pay a commission on each order placed through Grubhub's platform, allowing them to access the customer base and delivery infrastructure provided by the company.

    Additionally, Grubhub charges delivery fees to customers, which vary based on factors such as distance and order value. These fees contribute to Grubhub's overall revenue and help cover the costs associated with delivery services.

    Conclusion

    The Grubhub Business Model Canvas provides a comprehensive overview of how the company operates and creates value for its customers and partners. By focusing on key partnerships, activities, value propositions, customer segments, and revenue streams, Grubhub has established itself as a leading player in the online food delivery industry. Understanding the intricacies of its business model can assist in analyzing its success and identifying potential areas for improvement.

    Which companies are the competitors of Grubhub?

    Competitors of Grubhub

    Grubhub, as a leading food delivery platform, faces fierce competition in the rapidly growing and highly competitive market. Here are some of the main competitors that Grubhub contends with:

    1. Uber Eats

    Uber Eats, a subsidiary of Uber Technologies, is one of the major players in the food delivery industry. With its extensive network of drivers and strong brand recognition, Uber Eats has rapidly expanded its presence in many countries. The platform offers a wide selection of restaurants and provides users with convenient delivery options.

    2. DoorDash

    DoorDash is another significant competitor in the food delivery space. Known for its extensive partnerships with various restaurants, DoorDash boasts a large selection of cuisines and has a strong presence in numerous cities across the United States and Canada. The platform has gained popularity for its efficient delivery service and user-friendly interface.

    3. Postmates

    Postmates is a delivery service that not only focuses on food but also offers delivery of everyday items, groceries, and even alcohol. While not solely dedicated to the food delivery market, Postmates competes with Grubhub by providing a diverse range of delivery options. Postmates' delivery fleet includes not only drivers but also cyclists and walkers, allowing for quick and efficient deliveries.

    4. Seamless

    Seamless, originally launched in 1999, is now part of the Grubhub family after merging in 2013. Although Seamless and Grubhub share resources and infrastructure, they still compete against each other in some markets. Seamless is popular in major cities and known for its seamless ordering process, extensive restaurant selection, and reliable delivery service.

    5. Caviar

    Caviar, acquired by Grubhub in 2019, is a premium food delivery platform that focuses on providing high-end and upscale dining experiences. While Caviar's target market differs from Grubhub's broader approach, it still competes with Grubhub in terms of user acquisition and market share. Caviar distinguishes itself by offering curated menus from top-rated local restaurants and catering to customers seeking premium food delivery options.

    These are just a few of the notable competitors in the food delivery industry that directly challenge Grubhub's market share and customer base. With the continuous growth and innovation in the industry, competition is expected to remain fierce as companies strive to capture a larger slice of the expanding food delivery market.

    Grubhub SWOT Analysis

    Strengths

    Grubhub, as a leading food delivery platform, has several notable strengths:

    1. Extensive Restaurant Network: Grubhub boasts a vast network of partnered restaurants, offering customers a wide variety of cuisines and dining options. This extensive selection gives them a competitive edge over many other food delivery services.

    2. User-Friendly Interface: The Grubhub app and website have a user-friendly interface, making it easy for customers to browse menus, place orders, and track deliveries. This seamless user experience contributes to customer satisfaction and loyalty.

    3. Advanced Delivery Tracking: Grubhub provides real-time tracking of deliveries, allowing customers to monitor the progress of their orders. This feature not only enhances transparency but also improves the overall customer experience.

    4. Strong Brand Recognition: Grubhub has established a strong brand presence in the food delivery industry. Their name has become synonymous with online food ordering, giving them a competitive advantage and attracting a large customer base.

    Weaknesses

    Despite its strengths, Grubhub also faces several weaknesses:

    1. High Commission Fees: Grubhub charges restaurants a significant commission fee for each order placed through their platform. This high cost can deter smaller or independent restaurants from partnering with Grubhub, potentially limiting their restaurant network.

    2. Delivery Challenges: Grubhub relies on third-party delivery drivers, which can lead to inconsistencies in delivery times and quality. This dependence on external drivers may result in occasional delivery mishaps, impacting customer satisfaction.

    3. Limited Geographic Coverage: While Grubhub operates in many cities across the United States, its coverage is not nationwide. This limitation restricts access to the service for potential customers in certain areas, reducing their market reach.

    Opportunities

    Grubhub has several opportunities to explore and grow its business:

    1. Expansion into New Markets: Grubhub can capitalize on untapped markets by expanding its services into new cities or even internationally. This expansion would allow them to reach a wider customer base and increase their revenue potential.

    2. Partnerships with Grocery Stores: With the rise in demand for grocery delivery, Grubhub could explore partnerships with grocery stores to offer customers a convenient one-stop solution for both food and grocery deliveries. This diversification could attract new customers and increase their market share.

    3. Investment in Technology: Grubhub can invest in technological advancements to further enhance their platform's features and functionality. This could include artificial intelligence for personalized recommendations, improved delivery tracking systems, and streamlining the ordering process.

    Threats

    Grubhub faces various threats that could potentially impact its market position:

    1. Intense Competition: The food delivery industry is highly competitive, with numerous players vying for market share. Competitors like Uber Eats, DoorDash, and Postmates pose a threat by offering similar services and aggressively expanding their operations.

    2. Changing Consumer Preferences: Consumer preferences and behaviors can shift rapidly, making it crucial for Grubhub to adapt to evolving trends. If customers increasingly prefer alternative dining options, such as meal kits or ghost kitchens, it could reduce demand for traditional food delivery services.

    3. Regulatory Challenges: The food delivery industry is subject to evolving regulations and potential legal challenges. Changes in labor laws, delivery fees caps, or regulations regarding third-party delivery partnerships could impact Grubhub's business model and profitability.

    By conducting a thorough SWOT analysis, Grubhub can identify its strengths, weaknesses, opportunities, and threats, allowing them to develop strategic plans to capitalize on strengths, address weaknesses, explore new opportunities, and mitigate potential threats.

    Key Takeaways

    • Grubhub is owned by Just Eat Takeaway.com, a leading global online food delivery marketplace.
    • The mission statement of Grubhub is to connect hungry diners with local restaurants and provide them with convenient, reliable delivery options.
    • Grubhub primarily makes money by charging restaurants a commission fee on each order placed through their platform. They also generate revenue through advertising and delivery fees.
    • The Grubhub business model canvas consists of key components such as customer segments, value proposition, channels, customer relationships, revenue streams, key activities, key resources, and key partnerships.
    • Grubhub faces strong competition from other food delivery platforms such as Uber Eats, DoorDash, and Postmates. These companies are constantly striving to gain market share and offer similar services to Grubhub.
    • In terms of SWOT analysis, Grubhub's strengths include a large customer base and a well-established brand. However, they face weaknesses such as high competition and increasing operational costs. Opportunities for Grubhub include expanding into new markets and diversifying their services, while threats include new entrants in the market and changing consumer preferences.

    Conclusion

    In conclusion, Grubhub is owned by Just Eat Takeaway.com, a leading online food delivery marketplace. The mission statement of Grubhub is to connect hungry diners with local restaurants, providing them with the convenience of ordering food online or through their mobile devices.

    Grubhub makes money through various revenue streams, including commissions from restaurants on each order, delivery fees, and advertising fees from restaurants seeking greater visibility on the platform. They also offer subscription services like Grubhub+ for additional revenue.

    The Grubhub Business Model Canvas provides a comprehensive overview of the key elements that contribute to the company's success. From customer segments and value propositions to channels, customer relationships, and revenue streams, the canvas explains how Grubhub operates within the food delivery market.

    Grubhub faces competition from several other food delivery companies, including DoorDash, Uber Eats, and Postmates. These companies offer similar services and are constantly striving to capture a larger share of the market. Grubhub's strong brand recognition and extensive network of restaurant partnerships give them a competitive edge, but they must continue to innovate and adapt to stay relevant.

    A SWOT analysis of Grubhub reveals their strengths, such as a large user base and strong brand presence, as well as weaknesses like high competition and increasing operating costs. Opportunities for Grubhub include expanding into new markets and offering additional services, while threats include regulatory challenges and potential market saturation.

    Overall, Grubhub has established itself as a dominant player in the online food delivery industry. With their focus on customer convenience and a wide range of restaurant options, they continue to attract and retain a large user base. However, they must navigate the challenges posed by competitors, changing consumer preferences, and evolving market dynamics to sustain their growth and success in the long run.

    FAQs

    What is a SWOT analysis for a food outlet?

    A SWOT analysis for a food outlet is an assessment that examines the strengths, weaknesses, opportunities, and threats involved in operating a food outlet. It helps identify internal factors that can be leveraged or improved upon, as well as external factors that may pose challenges or offer potential advantages. Here is a breakdown of each component in a SWOT analysis for a food outlet:

    1. Strengths:
    • Unique selling proposition: What sets the food outlet apart from its competitors? It could be a specialty cuisine, a signature dish, or a unique dining experience.
    • Quality of food and service: Assess the level of culinary expertise, taste, presentation, and customer service.
    • Location: Consider the accessibility, visibility, and proximity to target customers.
    • Reputation: Examine the brand image, customer reviews, and word-of-mouth recommendations.
    • Pricing: Evaluate the affordability and perceived value of the food items.
    1. Weaknesses:
    • Limited menu options: Identify any gaps or deficiencies in the food offerings that could limit customer appeal.
    • Inconsistent quality or service: Analyze any recurring issues with food preparation, customer service, or staff training.
    • Lack of brand recognition: Assess the level of brand awareness and marketing efforts.
    • Operational inefficiencies: Identify any bottlenecks or challenges in the supply chain, inventory management, or food preparation process.
    • Financial constraints: Evaluate the financial resources available and any constraints that may impact the overall operations.
    1. Opportunities:
    • Market trends: Identify emerging food trends, dietary preferences, or consumer demands that the food outlet can capitalize on.
    • Expansion or diversification: Assess the potential to open new outlets, introduce delivery services, or expand product offerings.
    • Collaborations: Explore partnerships with local farmers, suppliers, or other food-related businesses.
    • Customer engagement: Utilize social media, loyalty programs, or online platforms to engage with customers and gather feedback.
    • Changing demographics: Identify target markets that are growing or evolving, such as health-conscious consumers or vegan/vegetarian communities.
    1. Threats:
    • Competition: Analyze the intensity and strategies of existing competitors in the local market.
    • Economic factors: Assess the potential impact of economic downturns, inflation, or fluctuating food prices.
    • Changing regulations: Stay informed about changes in food safety, health codes, licensing requirements, or labor laws.
    • Seasonality: Evaluate the impact of seasonal variations in customer demand.
    • External events: Consider unexpected events like natural disasters, pandemics, or political instability that could disrupt operations.

    By conducting a SWOT analysis, a food outlet can gain valuable insights into its current position in the market, identify areas for improvement, and develop strategies to leverage opportunities and mitigate threats.

    What is SWOT analysis for opportunities?

    SWOT analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats of a business or project. When conducting a SWOT analysis for opportunities, the focus is on identifying external factors that could potentially benefit the business or project. Here are a few key points to consider:

    1. Identify emerging market trends: Look for new market trends, changes in customer behavior, or industry advancements that could present opportunities for growth or expansion.

    2. Analyze competitor weaknesses: Assess your competitors' weaknesses and vulnerabilities, as they may create openings for your business to gain a competitive advantage.

    3. Explore untapped customer segments: Identify potential customer segments that have not been targeted or addressed by your competitors. Determine how your business can cater to their needs and preferences.

    4. Leverage technological advancements: Evaluate how advancements in technology can help improve your business operations, streamline processes, or create new products or services.

    5. Seek strategic alliances or partnerships: Consider forming alliances or partnerships with other businesses or organizations that can provide access to new markets, resources, or expertise.

    6. Evaluate regulatory or legal changes: Monitor changes in regulations, laws, or government policies that could create opportunities for your business. Adapt your strategies accordingly.

    Remember, opportunities identified through a SWOT analysis should be realistic, aligned with your business goals, and supported by thorough research.

    What is Grubhub's mission statement?

    Grubhub's mission statement is "to connect hungry diners with great, local restaurants."

    What is SWOT analysis to arrive at your business idea of a product service?

    SWOT analysis is a framework used to evaluate the strengths, weaknesses, opportunities, and threats of a business idea or product/service. It helps entrepreneurs assess the internal and external factors that can impact their venture's success. Here's how SWOT analysis can be applied to arrive at a business idea for a product or service:

    1. Strengths: Identify the unique advantages and strengths of your business idea. Consider factors such as your expertise, skills, resources, or any competitive edge you have over existing offerings in the market.

    2. Weaknesses: Assess the limitations or weaknesses of your business idea. This could include lack of experience, limited resources, or potential challenges that may hinder the success of your product/service.

    3. Opportunities: Evaluate the external factors that present opportunities for your business idea. These could be emerging trends, market gaps, changing customer needs, or technological advancements that can be leveraged to create a competitive advantage.

    4. Threats: Analyze the external factors that pose threats to your business idea. This could involve competition, regulatory changes, economic factors, or any other challenges that may hinder the growth or adoption of your product/service.

    By conducting a comprehensive SWOT analysis, you can gain valuable insights into your business idea's viability and potential. This analysis can help you identify areas to capitalize on, mitigate weaknesses, exploit opportunities, and address threats, ultimately shaping your product/service concept to maximize its chances of success.

    Want to create a presentation now?

    • instantly

      Instantly Create A Deck

      Let PitchGrade do this for me

    • smile

      Hassle Free

      We will create your text and designs for you. Sit back and relax while we do the work.

    Explore More Content

    Companies